The Obama administration moved to defuse a lingering controversy over the Affordable Care Act on Friday, saying that while religious institutions would not have to pay for contraception, employees would still be guaranteed access to birth control.

The compromise, which expands the field of exemptions to a requirement in the act that employees provide contraception in their insurance plans, was immediately praised by Catholic groups and Planned Parenthood alike.

The one group that has not praised the shift is the insurance lobby. Insurance companies, it appears, will bear the cost of free contraception the church refuses to provide.

"The rules proposed today by HHS appear to go a long way toward rectifying the most problematic provisions of the mandate," said Bill Donohue, head of the Catholic League, in a statement. A related group, Catholics United, echoed the praise, as did Planned Parenthood president Cecile Richards.

"This policy delivers on the promise of women having access to birth control without co-pays no matter where they work," Richards said. "This policy makes it clear that your boss does not get to decide whether you can have birth control."

President Barack Obama's 2010 healthcare law requires that businesses cover employees' birth control costs as part of their insurance plans. The law mandates coverage for such birth control measures as sterilization and emergency contraception pills, or so-called "day-after" pills.

The requirement has created a deluge of lawsuits from religious institutions and private businesses with moral objections. At least one of dozens of related lawsuits over the matter appeared likely to land before the US supreme court.

On Friday the Department of Health and Human Services vastly expanded the group of employers who would be eligible for exemptions from the birth control clause. Originally religious institutions did not qualify if they served a large number of people of other faiths. Now any outfit the IRS recognizes as a religious nonprofit qualifies. That includes a large number of Catholic hospitals and universities.

Separate insurance plans would be written to cover contraception for employees of those institutions, the administration announced. For now, it appears, the cost of those plans will fall to insurance companies – although it could eventually fall to taxpayers.

A spokesman for the America's Health Insurance Plans, the main industry lobby, had no immediate comment on the rule change, Bloomberg reported.

The administration has broad latitude in writing rules for how federal regulators must enforce the healthcare law.